Agri Energy sells U.S. biofuel assets

Melbourne, Australia-based biofuel development company Agri Energy said today it would sell its U.S. biofuels business to a consortium of U.S. management and investors for $42.5 million.

The move comes three months after the biofuels group put a hold on any project development in its home country.

"Investment support for company has been adversely affected by the poor performance of the biofuels industry in the Australian market, high feedstock costs worldwide and delays to completion of the project," said Peter Anderton, chairman and CEO of Agri Energy.

The company's U.S. management and investors, including Pangaea Technology Finance, will be taking over Agri Fuel's flagship 60 million gallon per year biodiesel project in Beatrice, Neb.

The Beatrice plant's been beset by delays due to extended cold weather in the area and by manufacturing defects.

Originally set for completion in the third quarter of 2007, the facility is expected to start production by the end of this month.

Today's deal also includes an adjacent 55 million gallon per year ethanol project that's still under development.

"While the company maintains a positive perspective on the long term opportunity in the biofuels sector, the structure and focus of these developments need to be reassessed in light of the substantially changed domestic and global landscape," said Anderton.

Agri Energy still has two projects under development in Europe, a 500,000 tonne per year oil seed crushing facility in Hungary and a 105 million liter per year biodiesel plant in Austria.

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